USDA's web-based supply chain moves food faster

Aug. 12, 2014 - 12:00PM
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USDA's Web Based Supply Chain Management system enabled the ordering, procurement and delivery of 8.5 billion pounds of domestically produced foods during the last fiscal year, according to the agency. (Lance Cheung/USDA)

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Since 2011 the Department of Agriculture’s Web Based Supply Chain Management System (USDA WBSCM) has demonstrated its ability to get food into the right hands faster and more efficiently as the agency supplies school lunch programs, food banks and others with needed commodities.

Now the system’s managers in the Agricultural Marketing Service (AMS) are ready to take a step back and evaluate how the system can drive even greater logistics efficiencies.

“You never implement a system where it works 100 percent. You are continually learning,” said AMS Commodity Procurement Program Director Dave Tuckwiller.

The numbers, please

Prior to implementing the Web-based logistics system, AMS was hobbled by antiquated legacy processes. Purchasing required reams of paper: Vendors submitted invoices by mail and payment could take weeks. Contractors were faxing their documents as late as 2010.

SAP-based WBSCM has changed all that. Solicitations go up online and orders are placed against a single catalog. Vendors are required to bid through the Web-based system if they want to play. Contract awards and payment all have been digitized through the system.

The $100 million project now encompasses some 8,000 users according to AMS. It ties together five agencies: AMS, Food and Nutrition Service (FNS), Farm Service Agency, Foreign Agricultural Service and the U.S. Agency for International Development.

The project has shown tangible results since its launch. Users have ordered 8.5 billion pounds of domestically produced foods, awarding nearly $3 billion in contracts during the last fiscal year, according to AMS. Domestic transportation costs are down 11 percent. With the new efficiencies, spoilage of perishable foods has decreased by 15 to 20 percent.

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“In 2012 there was a presidential relief emergency order for draught assistance in the Midwest that included certain agricultural products. We were able to step in and make a purchase of surplus products in a six-week period that would have taken months in the old system,” Tuckwiller said. “Everything happens right then and there. You put something in and it’s available right away.”

Users say they are ready now to see the system evolve to its next iteration. “We are looking more at performance-based procurement. We also are looking at how we can better satisfy a range of customers,” said Dennis Sullivan, systems branch chief for food distribution at USDA’s FNS.

Streamlining delivery

FNS manages procurement of commodities for school lunch and emergency response food programs. In fiscal 2013 the agency fulfilled some 47,000 orders comprised of 181,000 line items. “It could be a load of canned corn going to a state warehouse or chicken going to a processor or beef going in to become meatballs or hamburgers,” Sullivan said.

Managing all that food, much of which is perishable, requires a complex logistical effort. “From our side the challenge lies in the volume and the timing,” Sullivan said. “We have to take these orders in, review them, approve them and get them to USDA’s procurement offices. And we are dependent upon the harvest, we are dependent upon procurement to guarantee supplies. So generally we have only a week to two, depending upon the products in our heaviest ordering periods.”

As AMS undertakes a business process review of the Web-based system, Sullivan said he would like to see planners build in improved reporting functionality.

For example, suppliers today give feedback via monthly spreadsheets. That functionality ought to be integrated into the ordering systems. “We’d like to tie it end to end to be able to better monitor it on our side,” Sullivan said.

In addition, he’d like to see greater efficiencies in the process of delivering product. Right now states in need of partial truckloads must do the legwork to aggregate orders into full truckloads. Sullivan said it makes better sense for the Web-based system to handle the logistics there. “We would like to take some of that burden off of the states and streamline that part of it for them,” he said. “That is something we want to revisit.”

These and other elements of the system will likely come under scrutiny in the coming months. Much will depend on improved technologies. “We are getting the system to the latest and greatest software, which we will implement in early August, and then we will step back to look at the business processes,” Tuckwiller said.

He foresees a broad collaboration driving this review. “We envision representatives from all our constituencies — actual school districts, state agencies, vendors who place bids — all sitting at the table,” he said. “The business is built upon partnerships, so what we envision is a partnership to undergo this business transformation effort.”